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ENTREPRENEURSHIP DEVELOPMENT
Entrepreneurship Development
2
WHO IS AN ENTREPRENEUR?
 The word “entrepreneur” is derived from the French verb
“enterprendre”.
-literally- “go-between or to undertake”.
Entrepreneur – Individual who takes risk and starts something new
One who relentlessly pursues opportunities, beyond the resources
currently controlled
The entrepreneurship is very a old concept according to which any
one who runs business is called an entrepreneur.

How was the factory system then?

 The more precise meaning of entrepreneur is; one who
perceives a need and then brings together manpower,
material and capital required to meet that need.

Then he is a manager?!!!!?
AN ENTREPRENEUR IS A….
…Person involved in any business who
-understands the market dynamics
-searches for change
-responds to it and
-exploits it as an opportunity……
 The Frenchmen who organized and led military expeditions were referred to
as “entrepreneurs”.
Around 1700 A.D. the term was used for architects and contractor of public
works.
In many countries, the term entrepreneur is often associated with a person who
starts his own new business.
Oxford Dictionary
“A person who sets up a business or businesses, taking on financial risks in
the hope of profit”
International Encyclopaedia
“An individual who bears the risk of operating a business in the face of
uncertainty about the future conditions”
SOME MORE DEFINITIONS OF AN
ENTREPRENEUR
 One who exhibits behavior including (a) initiative taking (b)
organizing and reorganizing social and economic mechanism to
turn resources and situations to practical account and (c)
acceptance of risk or failure
 One who brings resources, labour, material and other assets into
combinations that make their combined value greater than before
 A person who is able to look at the environment, identify
opportunities to improve it, marshal resources and implement
action to maximize those opportunities
 Entrepreneurs assemble resources including innovations, finance
and business acumen in an effort to transform innovations into
economic goods

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world famous management gurus say…..
 SCHUMPETER'S DEFINITION
The entrepreneur in an advanced economy is an individual who
introduce something new in the economy- a method of production not
yet tested by experience in the branch of manufacturing, a product
with which consumers are not yet familiar, a new source of raw
material or of new markets and the like”
DRUCKER’S VIEWS ON ENTREPRENEUR
“An entrepreneur is the one who always searches for change,
responds to it and exploits it as an opportunity. Innovation is the
specific tool of entrepreneurs, the means by which they exploit
changes as an opportunity for a different business or different
service”
RICHARD CANTILLON

“A person who pays certain price for a product to resell

it at an uncertain price thereby making decision about
obtaining and using resources while assuming the risk of
enterprise”
 ADAM SMITH
The entrepreneur as an individual who forms an organization for
commercial purpose. He/She is proprietary capitalist, a supplier of
capital and at the same time a manager who intervenes between the
labor and the consumer.

“Entrepreneur is an employer, master,

merchant but explicitly considered as
a capitalist”
Today, an entrepreneur is
-an innovator or developer
-who recognizes and seizes opportunities;
-converts those opportunities into workable/marketable ideas;
-assumes the risks of the competitive marketplace to implement these
ideas;
-acknowledges financial, emotional & social risks;
-adds value through time, effort, money, or skills;
-thus satisfies constantly changing customer needs;
-realizes the rewards from those' efforts,
personal satisfaction and independence.
Entrepreneurship has been considered as the propensity
of mind to take calculated risk with confidence to
achieve predetermined business objectives
Entrepreneur as innovator…..
-reforms the pattern of production by exploiting an
invention or an untried technological method of
producing a new commodity or
-producing an old one in a new way,
-opening a new source of supply of materials or
-a new outlet for products,
-by organizing a new industry

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ENTREPRENEURSHIP

The process of
starting and
running one’s
own business
ENTREPRENEURSHIP
 Entrepreneurship is the process of
• creating something new with value
• by devoting the necessary time and effort
• assuming the accompanying financial, psychological,
and social risks
• receiving the resulting rewards of independence,
personal satisfaction and money

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ENTREPRENEURSHIP =
 Way of thinking
 Spotting opportunity

 Taking initiative

 Implementation driven

 Resource utilization

 Acceptance of risk/failure
In the twentieth century, the word became
synonymous or at least closely linked with
free enterprise and capitalism

freedom of private business to organize and operate for profit in a competitive

system without interference by government beyond regulation necessary to
protect public interest and keep the national economy in balance
an economic and political system in which a country's trade and industry are
controlled by private owners for profit, rather than by the state.
entrepreneurs in the twenty-first century are considered the
heroes of free enterprise. Many of them have used
innovation and creativity to build multimillion-dollar
enterprises from baby businesses-some in less than a
decade. These individuals have created new products
and services and have assumed the risks associated with
these ventures.
 Large companies

Small businesses

1920 2020
CHARACTERISTICS OF ENTREPRENEURS
Most entrepreneurs possess the following characteristics:
1. Risk Takers
2. Perceptive
3. Curious
4. Imaginative
5. Persistent
6. Goal-Setters
7. Hardworking
8. Self-Confident
9. Flexible
10. Independent
 Risk Taker
There is no sure thing in business. A
failed business could mean bankruptcy
or near bankruptcy. Not everyone can
cope with that stress

Businesses face risk.

Successful entrepreneurs minimize and
manage risk through proper research,
business planning, skill development and
assessment of the
venture’s prospects for success.
 Perceptive
Entrepreneurs do not avoid problems

Entrepreneurs view problems as

opportunities and take them as
challenges to be conquered to
learn, improve, grow, create and
develop new ideas
 Curious
Entrepreneurs like to know:
 How things work?
 Could things work?

And answer questions such as:

 What if?
 And I wonder…

Entrepreneurs take the time and initiative to pursue the

unknown, do the research to find out the answers.
 Imaginative
Entrepreneurs imagine solutions
to problems and create new
products or generate new ideas

They have a vision (visionaries)

Persistent
Successful entrepreneurs
face constant challenges
such as:
1. mistakes made
2. money and family stress
3. confronting criticism
4. unforeseen events

Successful entrepreneurs do not

give up.
Goal Setter

Successful
entrepreneurs are
motivated by:
1. setting new goals
2. mapping out the
steps to take to reach
their goals.
 Hardworking

No success comes easy. There is

no easy way to be successful.

The road to excellence is not

paved by a single act, but rather a
series of acts.
 Self-Confident
Entrepreneurs believe in
themselves – they have a postive
self-worth (self-esteem), and self-
image

Believe their efforts will pay off

 Flexible
The only constant in life and
business is change

Entrepreneurs view change as an

opportunity

Must be able to be flexible and adapt

to changing trends in the market,
technology, economic environment
and competitive environments.
Independent

Entrepreneurs have a need

to be in control of their own
destiny.

They don’t like to work in a

controlled environment
being told what to do.
 What Entrepreneurs exhibit?
 Passion, Belief and Fun
 Passion that goes beyond financial rewards; the sense of

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satisfaction in achieving something new
 Treating the entrepreneurship as life itself – beyond a career –
living and breathing the enterprise
 Belief that the enterprise will create something of value to
people and society – that it will make people’s lives better

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 What Entrepreneurs exhibit?
 Initiative taking or ownership and execution
intelligence

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 Sense of ownership – taking responsibility and finding
solutions for every problem without losing focus of the goal
 Execution determines success or failure of enterprise
 Ability to start and sustain by building the right structure,
ecosystem, business model etc.

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 What Entrepreneurs exhibit?
 Tenacity despite obstacles
 Entrepreneurship involves experimentation and therefore,

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some failures
 Tenacity and focus despite failures
 Perseverance of goals with course correction and open mind

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 What Entrepreneurs exhibit?
 Customer focus
 Understanding and exploiting how your product/service is

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creating value for customers
 Deep knowledge/expertise in product/service
 Thorough understanding of customer’s unfulfilled needs

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  One characteristic of entrepreneurs stands
out:
Diversity!
 Anyone – regardless of age, race, gender,
color, national origin, or any other
characteristic – can become an
entrepreneur (although not everyone
should).
 E:\VIDEO\Entrepreneurship\Story of Walton Family.flv

Ch. 1: The Foundations of Entrepreneurship Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 1 - 37
 Benefits of Entrepreneurship
The opportunity to:
 Create your own destiny
 Make a difference
 Reach your full potential
 Reap impressive profits
 Contribute to society and to
be recognized for your efforts
 Do what you enjoy and to have fun at it

Ch. 1: The Foundations of Entrepreneurship Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 1 - 38
 Drawbacks of
Entrepreneurship
 Uncertainty of income
 Risk of losing your entire investment
 Long hours and hard work
 Lower quality of life until the business
gets established
 High levels of stress
 Complete responsibility
 Discouragement
Ch. 1: The Foundations of Entrepreneurship Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 1 - 39
 Entrepreneurship Development
WHAT ARE THE DIFFERENCES BETWEEN A
ENTREPRENEUR AND A MANAGER?

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TRADITIONAL MANAGER DELEGATES AND
SUPERVISES THE SUBORDINATES
WHILE HAVING LEAST DIRECT
INVOLVEMENT.

THE ENTREPRENEUR HAS MORE OF DIRECT

INVOLVEMENT WITH LEAST DELEGATION
TRADITIONAL MANAGER AVOID RISK WHILE
ENTREPRENEUR IS READY TO ACCEPT
RISK.
THE CORPORATE MANAGERS ARE MOSTLY
CONCERNED ABOUT THE LIKES AND
DISLIKES OF THEIR SENIOR MANAGERS,

THE ENTREPRENEURS SERVE THEMSELVES

AND FOR THEIR ORGANIZATION.
ENTREPRENEUR BUILDS STRONG
RELATIONS WITH EVERYBODY AROUND
THEM

CORPORATE MANAGER FOLLOW THE

RELATIONSHIP AS PER THE ORGANIZATION
CHART.
CORPORATE MANAGERS ARE MOTIVATED
BY SALARY RAISE, PROMOTION AND OTHER
CORPORATE REWARDS,

WHILE INDEPENDENCE AND SCOPE OF

WORKING CREATIVELY MOTIVATES
ENTREPRENEURS.
 ENTREPRENEUR VS. MANAGER
Entrepreneur
• Involved with the start-up
process
• Assumes financial,
psychological and material risks
• Driven by passion and
opportunity
• Initiates change
• His own boss
• Can fail or get a huge reward
• Creates Wealth
• Employer – creates jobs
Manager
• Involved in running a continuing
business
• No such risks
• Driven by resources and laid down
processes
• Follows rules and procedures
• Is a hired employee
• Gets fixed rewards and salary
• Manages Wealth
• Employee – works for wages
 Motive : The main motive of
an entrepreneur is to start a
venture by setting up an
enterprise. He understands the
venture for his personal
gratification.
 Status :An entrepreneur is the
owner of the enterprise.
 Risk bearing : An
entrepreneur being the
owner of the enterprise
assumes all risks and
uncertainty involved in
running the enterprise.
 But, the main motive of a
manager is to render his
services in an enterprise
already set up by someone
else i.e., entrepreneur.
 A manager is the servant in
the enterprise owned by the
entrepreneur.
 A manager as a servant
does not bear any risk
involved in the enterprise.
 Rewards : The reward an
entrepreneur gets for bearing
risks involved in the
enterprise is profit which is
highly uncertain.
 Innovation : Entrepreneur
himself thinks over what and
how to produce goods to
meet the changing demands
of the customers.
 A manager gets salary as
reward for the services
rendered by him in the
enterprise. Salary of a
manager is certain and fixed.
 But, what a manager does is
simply to execute the plans
prepared by the entrepreneur.
Thus, a manager simply
translates the entrepreneur’s
ideas into practice.
 Qualification : An
entrepreneur needs to
possess qualities and
qualifications like high
achievement motive,
originality in thinking,
foresight, risk -bearing
ability and so on.
 On the contrary, a
manager needs to possess
distinct qualifications in
terms of sound
knowledge in
management theory and
practice.

An entrepreneur can be a manager also, but a manager cannot be an

entrepreneur.
FUNCTIONS OF AN ENTREPRENEUR

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 Identifying entrepreneurial opportunity – There are many
opportunities in the world of business. These are based
on human needs like food, fashion, education, etc.,
which are constantly changing. These opportunities are
not realized by common man, but an entrepreneur senses
the opportunities faster than others do. An entrepreneur
therefore, has to keep his eyes and ears open and require
imagination, creativity and informativeness.
 Turning ideas into action : An entrepreneur should be
capable of turning his ideas into reality. He collects
information regarding the ideas, products, practices to
suit the demand in the market. Further steps are taken to
achieve the goals in the light of the information
collected.
 Planning of the project: He is the main architect to
conceive the idea of launching the project and to plan the
structure of business.
 Conducting Feasibility study– The entrepreneur conducts
studies to assess the market feasibility of the proposed
product or services. He anticipates problems and
assesses quantity, quality, cost and sources of inputs
required to run the enterprise. Such a blue print of all the
activities is termed as a 'business plan' or a 'project
report'.
 Resourcing – The entrepreneur needs various resources
in terms of money, machine, material, and men to
running the enterprise successfully. An essential function
of an entrepreneur is to ensure the availability of all
these resources.
 Setting up of the Enterprise – For setting up an enterprise
the entrepreneur may need to fulfill some legal
formalities, find out a suitable location, design the
premises, install machinery and do many other things.
 Facing the Risks: He faces uncertainly and bears risks in
his business uncertainly comprising those risks against
which it is not possible to insure. He also faces the risk
of other producers may enter the market.
 Ensuring collective participation: In a partnership, the
entrepreneurial functions are divided between the
partners.
 Managing the enterprise– One of the important function
of an entrepreneur is to run the enterprise. He has to
manage men, material, finance and organize production
of goods and services, market each product and service,
ensure appropriate returns (profits) of the investment.
 Managing the business: The entrepreneur is also
responsible for the management of business. He tries to
have a least cost combination of all factors of
production.
 Selling of Products: An entrepreneur is responsible for
marketing, advertising and maximizing his profits by
selling his product in the market.
 Scaling of Production: He decides the scale of business
according to the provision of capital, scope and time
available. Then, he takes the decision of what where and
how to produce goods.
 Distributing the Rewards: He is responsible of
distributing the rewards to all factors of production. He
pays the reward in the shape of rent, wage, and interest
and bears the risk of profit or loss himself.
 Ensuring Growth and Development– Once the enterprise
achieves its desired results, the entrepreneur has to explore
another higher goal for its proper growth and development.
The entrepreneur is not satisfied only with achieving a set
goal but constantly strives for achieving excellence.

 Then what are the managerial functions of an entrepreneur?

ENTREPRENEURSHIP PROCESS
 When all above functions are executed in a methodology,
then it becomes entrepreneurship process.

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ENTREPRENEURSHIP PROCESS
 the entrepreneurship process is a course of action that involves
all functions, activities and actions associated with identifying
and evaluating perceived opportunities and the bringing

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together of resources necessary for the successful formation of
a new firm to pursue and seize the said opportunities

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ENTREPRENEURIAL PROCESS

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What are the steps in entrepreneurial process?

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ENTREPRENEURIAL PROCESS
 Step 1: Identify and Evaluate the opportunity
 Step 2: Develop Business Plan

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 Step 3: Determine the Resources required

 Step 4: Manage and Grow the Enterprise

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STEP 1: IDENTIFY AND EVALUATE
THE OPPORTUNITY
 Opportunity assessment
 Creation and length of the opportunity

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 Real and perceived value of opportunity

 Risk and returns of opportunity

 Opportunity versus personal skills and goals

 Competitive environment

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STEP 2: DEVELOP BUSINESS PLAN
 Title Page; Table of contents
 Executive Summary
 Major sections

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 Description of business
 Description of industry
 Technology plan
 Marketing plan
 Financial plan
 Production plan
 Operational plan
 Summary
 Appendixes
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STEP 3: DETERMINE THE RESOURCES
REQUIRED
 Determine resources needed
 Determine existing resources

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 Identify resource gaps and available suppliers

 Develop access to needed resources

 Determine resource structure

 Identify and recruit people

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STEP 4: MANAGE AND GROW THE
ENTERPRISE
 Develop right management style
 Understand key variables for success

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 Identify problems and potential problems

 Implement control systems

 Develop and implement growth strategy

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IN ORDER TO EXECUTE THE FUNCTIONS,

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WHAT COMPETENCIES ARE REQUIRED FOR
AN ENTREPRENEUR?

73
COMPETENCIES REQUIRED FOR AN
ENTREPRENEUR
• Initiative – Acting out of choice, being pro-active in taking the
lead
• Identifying Opportunities – Mindset for seeing opportunities
and pursuing them to the end
• Persistence – Never say die
• Knowing – People, subject, Market, Open mind
• Quality – Attention to detail, being the best
• Commitment – Keeping your promises
• Efficiency – Optimizing, cut waste
• Systematic planning – Work breakdown, dependency
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 COMPETENCIES REQUIRED…….
CONTINUED

• Problem solving – Solution mindset

• Self confidence – Can Do attitude
• Assertiveness – Communicating idea, emphasis
• Persuasion – Ability to convince, share the vision
• Leadership – Ability to make others believe in your dream
• Monitoring – Ensuring progress, course correction
• Employee Welfare – Making them feel the ownership

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WHY BECOME AN ENTREPRENEUR?

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WHY BECOME AN ENTREPRENEUR?
 Be your own boss - independence
 Pursue your own ideas

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 Realize financial rewards

 Create wealth for society by creating jobs

…

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 COMMON MYTHS ABOUT
ENTREPRENEURS
 Entrepreneurs are born, not made
 Entrepreneurs are gamblers

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 Entrepreneurs are motivated primarily by money

 Entrepreneurs must be young and energetic

 Entrepreneurs love to be in the spotlight always

 Entrepreneurship undervalues human values

 Entrepreneurs spoils the social system

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CLASSIFICATION OF ENTREPRENEUR
1. According to Type of Business
1.1 Business Entrepreneur:
1.2 Trading Entrepreneur
1.3 Industrial Entrepreneur
1.4 Corporate Entrepreneur
1.5 Agricultural Entrepreneur
2. According to motivation
2.1 Pure Entrepreneur
2.2 Induced Entrepreneur
3. According to use of Technology
3.1 Technical Entrepreneur
3.2 Non Technical Entrepreneur
3.3 Professional or serial Entrepreneur
4. According to stages of development:
4.1 First generation Entrepreneur
4.2 Second generation Entrepreneur
4.3 Classical Entrepreneur
5. Classification by Danhof:
5.1 Innovating entrepreneur
5.2 Imitative Entrepreneur
5.3 Fabian Entrepreneur
5.4 Drone Entrepreneur

Which type of entrepreneur he was?

6. According to capital ownership
6.1 Private Entrepreneur
6.2 State Entrepreneur
6.3 Joint Entrepreneur
7. According to Gender/age
Man/woman/young/old/middle aged
8. According to area
Urban, rural
9. According to scale
large, medium, small, tiny
10. Others
10.1 Spiritual Entrepreneur
10.2 Social Entrepreneur
10.3 Edupreneur
10.4 Event entrepreneurs
10.5 Knowledge Entrepreneur
INTRAPRENEURSHIP
 entrepreneurship within a business

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 …. intrapreneur, to mean "A person within a large
corporation who takes direct responsibility for turning
an idea into a profitable finished product through
assertive risk-taking and innovation“

 Contemporary companies are keen in developing

intrapreneurial environment within themselves
 REASONS FOR INTEREST IN
INTRAPRENEURSHIP
 Organizations do not want to lose creative people inclined
towards– independence, freedom of expression, responsibility
seeking, freedom
 Organizations are threatened and face with stiff competition from
small creative entrepreneurship firms
 intrapreneurship helps in the next phase of growth and
diversification
 Impact on Market share & Margin

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REQUIRED CLIMATE FOR
INTRAPRENEURSHIP
 Top management support, sponsors and champion support
 Seeing intrapreneurs as future revenue generators and not

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expenses
 Encouraging new ideas, allowing honest mistakes

 Trial and error encouraged

 Making needed resources available

 Multidisciplinary teamwork approach

 Long time horizon

 Volunteer program

 Risk/reward system
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 ROLE OF ENTREPRENEURSHIP IN
ECONOMIC DEVELOPMENT
 more than just increasing per capita output and income
 involves initiating and constituting change in the
structure of business and society
 growth and increased output, which allows more wealth
 innovation as the key, not only in developing new
products (or services) for the market but also in
stimulating investment interest in the new ventures being
created
 innovation develops and commercializes through
entrepreneurial activity, which in turn stimulates
economic growth

See this innovation

 ROLE OF ENTREPRENEURSHIP IN
ECONOMIC DEVELOPMENT
 Entrepreneurs who are business leaders look for ideas and puts them
into effect in nurturing economic growth and development. They play
the most important role in the economic growth and development of
economy.
 The major roles played by an entrepreneur in the economic
development of an economy are as follows.

Indian economy
 PROMOTES CAPITAL FORMATION
  Entrepreneurs promote capital formation by mobilizing the idle
savings of citizens. They employ resources for setting up their
enterprises. Such types of entrepreneurial activities lead to value
addition and creation of wealth, which is very essential for the
industrial and economic development of a country.
 EMPLOYMENT GENERATION
  Entrepreneurs provide instant large-scale employment to
the unemployed which is an unending problem of any
country. Small entrepreneurs provide self employment to
artisans, technically qualified persons and professionals. 
 As these enterprises grow, they keep providing direct and
indirect employment opportunities to many more. In this
way, entrepreneurs
clear the path towards economic development of a country.
 BALANCED REGIONAL DEVELOPMENT
  Entrepreneurs promote development of industries. They help to
remove regional disparities by industrializing rural and backward
areas. The growth of industries and business in these areas lead to
a large number of public benefits like road transport, health,
education, entertainment, etc. They help to reduce the problems of
congestion, slums and population in cities by providing
employment and incomes to them.
They help to improve the standard of living in sub-urban and rural
areas.
REDUCES CONCENTRATION OF
ECONOMIC POWER
 Industrial development normally leads to concentration of economic
power in the hands of a few individuals which results in the growth
of monopolies. Entrepreneurs contribute towards the development of
society by reducing concentration of income and wealth and weaken
the monopolies.
 WEALTH CREATION AND DISTRIBUTION
 Itstimulates impartial redistribution of wealth and income
in the interest of the country to more people and
geographic areas, thus giving benefit to larger sections of
the society. Entrepreneurial activities also ensure equitable
distribution of income and wealth by inculcating the spirit
of entrepreneurship amongst people thereby providing
them self employment with limited resources.
INCREASING GDP AND PER CAPITA INCOME
 Entrepreneurs are always looking out for opportunities.
They encourage effective resource mobilization of capital
and skill, bring in new products and services and develop
markets for growth of the economy. In this way, they help
increasing gross national product as well as per capita
income of the people in a nation.
IMPROVEMENT IN THE STANDARD OF LIVING
 Entrepreneurs adopt latest innovations in the production of wide
variety of goods and services in large scale that too at a lower cost.
This enables the people to avail better quality goods at lower prices
which results in the improvement of their standard of living.
 PROMOTES COUNTRY'S EXPORT TRADE
 Entrepreneurs earn valuable foreign exchange through increased
exports. They produce goods and services in large scale for the
purpose earning huge amount of foreign exchange from export.
This ensures economic independence and development.
INDUCES BACKWARD AND FORWARD
LINKAGES
 Entrepreneurs work in an environment of changing technology and
try to maximise profits by innovation. This induces backward and
forward linkages which stimulate the process of economic
development in the country.
 FACILITATES OVERALL DEVELOPMENT
  Entrepreneurs act as catalytic agent for change which
results in chain reaction. Once an enterprise is established,
the process of industrialization is set in motion. This unit
will generate demand for various types of units required
by it and there will be so many other units which require
the output of this unit. This leads to overall development
of an area due to increase in demand and setting up of
more and more units.
FACTORS INFLUENCING ENTREPRENEURSHIP
DEVELOPMENT
 Hard work/Perseverance
 Availability of resources

 Product quality

 Competence in Managing Business

 Accessibility to Information

 Adequate information and knowledge

 Future Planning

 Family & friends support

 Training

 Timely availability of loan

 Management & Marketing skills

 Business Credibility

 Institutions for Guidance and Follow up

CHALLENGES OF AN
ENTREPRENEUR
1. Developing the Vision and Business Idea
An entrepreneur must possess the ability to see what others
cannot see. While others see problems, an entrepreneur
must see opportunities. But seeing opportunities is just
the beginning. The main business challenge is going to
be the ability to forge that opportunity into a business
idea.
 In the late 70s and early 80s, while IBM saw increase in
demand for their mainframe computers, Steve Jobs
envisioned a personal computer in every home and Bill
Gates envisioned the need for easy to use software for
personal computers. That single vision made Bill Gates
the richest man in the world and Steve Jobs the most
famous business person of the 21st century.
 2. Raising Capital for Startup
Trying to convince investors about something that doesn t
exist is definitely a challenge. Trying to make them
understand that they are trustworthy and equal to the task
is not child s play especially when building the first
business.
 3. Assembling a Business Team
A team is a necessity for building a successful business. It s
the duty of an entrepreneur to make sure that their team
sees the future as the entrepreneur see.
An efficient strategic business team should comprise as
banker, financial adviser, accountant, attorney or legal
adviser and any other specialist that will be of
tremendous impact to the business.
 4. Finding the Right Business Location

5. Finding Good Employees

Business owners know how difficult it is to find a
hardworking, trustworthy employee. Most employees
want to work less and get paid more.
6. Finding Good Customers
Good customers are really hard to find. A good customer
will be loyal to the company and will be willing to
forgive if the business make a mistake and apologize. A
good customer will try to do the right thing that will
benefit both himself and company mutually
 7. Dealing with Competition
 8. Keeping Up With Industrial Changes and Trends
Trends have made and broken lot of businesses. profitable
businesses that have been wiped out by slight industrial
changes and trends. A typical example is the Dot com
trend, where many established industrial based
businesses were wiped out by new web based dot com
companies.
 9. Exiting the Business
Lack of an exit plan is the primary reason why most
businesses crumble after the death of the founder. An
exit strategy is very important to the long term survival
of a business..
10. Down in the Doldrums
According to several studies, entrepreneurs are more prone
to depression and anxiety than the average company
employee.
 11. Overestimating
 Another challenge Entrepreneurs face is overestimating
their initial success. company in 1 year and made
millions that you can do the same.
 12. Focus
 One of the biggest mistakes entrepreneurs make in their
early days is trying to be all things to all people. They
attempt to sell their product or service to too wide of a
market.
 13. Passion and Purpose
 Many entrepreneurs choose an oxymoronic approach to
business. They decide to start their own company
because they want unlimited income potential, to be their
own boss and holder of their own destiny. Yet as they
work on building their business they realize they lack
passion for what they re doing.
 14. Unforeseen Business Challenges and Expenses
 Unexpected law suits

 Inconsistent government policy

 Not being able to make payroll

 Unpaid bills and taxes

 Unexpected resignation of staff from sensitive office

 Bad debts from customers

 Loss of market share

 Dwindling working capital

 Inadequate stock or inventory

 History of Entrepreneurship
• In New Guinea around 17,000 BCE, where
locals would exchange obsidian (a volcanic
glass prized for its use in hunting tools) for
other needed goods – like tools, skins, and
food.
• Agricultural Revolution, which occurred about
12,000 years ago.
• Humans started to domesticate plants and
animals. Instead of having to roam, look for,
and hunt for their food in different regions
throughout the year, human populations could
remain stationary in one location and farm the
land.
• Villages and towns started developing close to
fertile lands.
• People didn’t need to spend all day hunting
and gathering for their own sustenance – it
was more efficient to let a smaller number of
farmers handle food production while the rest
of the population focused on other tasks.
• Some common areas of specialization in
entrepreneurship were:
– Hunting and gathering
– Fishing
– Cooking
– Tool-making
– Shelter-building
– Clothes-making
• When farmers grew more food than they
needed to support their own families, they
would sell food at the market to say, a clothes-
maker. The farmer’s family no longer needed
to make their own clothes.
• Towns and cities grew to include thousands of
people. Dependable sources of food
encouraged people to build permanent
settlements and homes. Different social
institutions arose around these permanent
structures, including religious centers, courts,
and marketplaces.
• As time went on, new areas of specialization
began to emerge. Early entrepreneurs would
work in areas like:
– Pottery
– Carpentry
– Wool-making
– Masonry
• Standards of living continued to increase.
• Between the Agricultural Revolution and 2000
BCE, cities started to appear around the world.
Early areas of civilization were concentrated
around rivers, particularly the Nile, the Tigris
and Euphrates, the Indus, and the Yellow and
Yangtze.
• Entrepreneurs began to realize that more
profits could be made by trading between cities
and countries.
• The right international trade route could make an
entrepreneur very wealthy. Some of the popular
trade routes at the time included:
– Trading salt from Africa across the Roman Empire
– Trading technologies like Chinese paper-making around
the world
– Trading rice from China across Asia
– Trading coffee, lemons, and oranges from Arabia into
Europe
– Trading gunpowder (a combination of carbon, sulphur,
and potassium nitrate) from China to other parts of the
world.
• One of the key developments in the history of
entrepreneurship (and in human history) was
the invention of money(2000BCE) in the form
of seashells, tobacco leaves, beads, or large
round rocks.
• Prior to the invention of money, all
entrepreneurship and trade took place
through the barter system.
• Over time, paper money and coinage
developed. Currency gave entrepreneurs
several important things:
– It facilitated long-distance trade
– It acted as a medium of exchange
– It provided a way for entrepreneurs to store value
– Obviously, currency changed the fate of
entrepreneurship forever.
• The population spurt starting around 1470 solidified the
market’s connection with entrepreneurship.
• During this period, entrepreneurs organized their business
together, regulated the quality of the goods produced, and
developed reputations for certain goods in towns across
medieval Europe.
• Entrepreneurs were able to purchase goods from abroad,
turn those goods into finished products, and then sell those
goods for a profit at a wider scale than ever before.
• Nevertheless, this period still gave rise to some of the
world’s most influential technologies, including the
windmill, paper mill, mechanical clock, the map, and the
printing press, among many others.
• The period from 1550 to 1800 gave rise to the
philosophy of mercantilism.
• Columbus’s “discovery” of the New World in
1492 would permanently change
entrepreneurship.
• During this period, entrepreneurs were known
more as merchants and explorers than as
entrepreneurs.
• Last 200 years of entrepreneurship as being
fuelled by “machines and markets”.
• Capitalism became more powerful around the
world. The theories of capitalism were
solidified in Adam Smith’s 1776 work An
Inquiry into the Nature and Causes of the
Wealth of Nations, where he destroyed the
idea of mercantilism. Instead, he argued that
self-interest was the driving force in societies
around the world.
• Thus, entrepreneurs of this period were able
to act in self-interest while still improving
society as a whole.
• The Industrial Revolution in the 18th century,
made entrepreneurship move from small-
scale production in small towns to large-scale
production in big cities.
• America played a particularly prominent role
during this period, giving rise to entrepreneurs
like Andrew Carnegie, J. Morgan, John D.
Rockefeller, Frank Kenan and Henry Ford.
• After World War II, entrepreneurship began to
change for a few different reasons.
• The economy was increasingly global and becoming
more global every decade. Better means of shipping
and communication made it easy for entrepreneurs
to sell products and services to a global audience.
• Massive economies like America could no longer
afford to concentrate solely on selling products to
American marketplaces only.
• There were also microeconomic factors like the number of people
owning cars. Especially in America, car ownership made it more
important to have highways between major cities. As highways
became more important, restaurants were needed where people
could eat while traveling.
• This is the environment where entrepreneurs like Ray Kroc made
their millions. Kroc created a standardized restaurant that cut down
on costs by serving a limited number of men items. Then, he
replicated that model.
• Other companies that prospered during this period included General
Electric, aircraft companies like Lockheed, IBM, and Holiday Inns.
• Other countries around the world experienced similar boosts in
growth following World War II. Japan, for example, became one of
the world’s largest economies by exploiting a large population
available for cheap wages. Germany experienced a similar trajectory.
• Today, entrepreneurs are the lifeblood of
economies all over the world. Even in
command economies like China,
entrepreneurs are valued for their
contributions to the economy and encouraged
to innovate to compete with companies
around the world.
Conclusion:

• entrepreneurship has always been ruled by the market forces known

as supply and demand. 
• Early entrepreneurs in the Agricultural Revolution met the needs of
farmers by providing them with tools and shelter. In exchange, they
received food that could feed their families.
• Everywhere in the world, entrepreneurs address demand by
providing supply. They innovated and invented new technologies to
solve problems that nobody had ever solved before.
• At the same time, competition has ensured that the entrepreneur’s
self-interest doesn’t cause an overall negative impact on society.
Competition prevents entrepreneurs from overcharging for goods or
underpaying employees, for example.
 Entrepreneurship-India facts
• India has a serious job crisis. Job creation is a
classic “wicked” problem;

• one of the most promising paths forward is

“mass entrepreneurship”, which is about
inspiring and helping millions of job-seekers to
become job-creating entrepreneurs.
• In 2015, figures from the labour ministry
indicated that India’s workforce is growing by
12 million a year,
• it is clear that our formal economy is ill
equipped to create net new jobs; while many
new jobs are being created, nearly as many
are also being destroyed by productivity and
efficiency gains and automation. 
• formalization of the economy through measures
like the goods and services tax, though essential,
is also resulting in job losses as informal small
businesses get replaced by more efficient formal
enterprises. 
• Women have been particularly hard hit; their
participation in the workforce has dipped from
35% to 26%.
• These powerful trends mean that India’s job
crisis will get rapidly worse unless we find a
massive new engine for job creation comparable
to IT services 20 years ago.
• The Nasscom Foundation estimates that India will
have over 10,000 start-ups by 2020, supporting
around 200,000 workers,
• “Mass entrepreneurship” refers to the millions of
ordinary local businesses that typically hire five or
more people, use local inputs and serve local
needs in every community.
• These range from a beauty salon or a food caterer
to a motorbike repair shop or artisan collective. 
•  In most thriving economies, they form the
backbone of the economy and employment.
• The past growth experience of the US and the
current progress of China have been
underpinned by a mass flourishing of local
entrepreneurs creating local businesses.
• But India is lagging behind in the promotion of
such businesses, while at the same time facing
massive shortages in job creation from other
sectors; only 21% of jobs in India are in SMEs
(small and medium-sized enterprises), versus
35% globally.
• China in 2014 September, it was reported that
16,000 businesses were being registered on an
average day. 
• Seventy per cent of these businesses were
responsible for creating employment for 10
million people last year.
• India ranks third in the list of countries with the
highest concentration of entrepreneurs globally